THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[01:00:00] JOHN VAUSE, CNN NEWSROOM ANCHOR: Hello, and welcome to our viewers in the United States and around the world. I'm John Vause, live in Los Angeles where it just turned 10:00 Wednesday night.

ISA SOARES, CNN NEWSROOM ANCHOR: And I'm Isa Soares in London where it's 6:00 on Thursday morning. Thank you very much for joining us.

VAUSE: Australia's Prime Minister Malcolm Turnbull is refusing to comment on a heated phone call over the weekend with U.S. President Donald Trump. Sources tell CNN Mr. Trump objected to an agreement for the United States to take in more than a thousand refugees living on islands of Australia's mainland. Many from the seven countries covered by President Trump's travel ban, one source says Mr. Trump abruptly ended the call.

And a short time ago, the President tweeted this, "Do you believe it the Obama administration agreed to take thousands of illegal immigrants from Australia. Why? I will study this dumb deal." Here's what Malcolm Turnbull had to say.

(BEGIN VIDEOCLIP)

MALCOLM TURNBULL, AUSTRALIAN PRIME MINISTER: But I'm not -- I'm not going to comment on these reports of a conversation. Australians know me very well. I always stand up for Australia in every forum.

(END VIDEOCLIP)

VAUSE: Joining me now, Brendon O'Connor, an Associate Professor at the University of Sydney. We also have CNN's military analyst, Lieutenant Colonel Rick Francona standing by on details of a blunt warning from the administration to Iran. Also here in Los Angeles, talk radio host, Mo' Kelly and Republican Consultant, John Thomas. Brendon, first to you, has there ever been a moment like this, a public dispute like this one between the United States and Australia?

BRENDON O'CONNOR, PROFESSOR AT UNIVERSITY OF SYDNEY: No, there hasn't been. So this will be a shocking to a number of people in the Australian political class. I think there's some sense in Australia that Australia is a favored friend. It's a bit like being cruel to your cousin will be how many Australians see it. There was bad disputes during the Whitlam period where Gough Whitlam was Prime Minister of Australia. He didn't get on at all about with Richard Nixon but that was behind closed doors, and we know that story through the archives rather than being played out on Twitter, which makes it a remarkable in some ways, a sign of disrespect towards the Australian Prime Minister, you've got to say.

VAUSE: Some have likened it to kicking the family dog. How will most Australians view this conversation between Prime Minister Turnbull and Donald Trump?

O'CONNOR: Well, I think some people will have the view that if you play with fire, you're going to get burned. The idea that you can hug Trump wisely, but you can talk behind closed doors and have an influence on him, is clearly not the case. So I think a new approach has to be taken. Tony Blair took this approach somewhat with George W. Bush, what the British called the hug him closely approach, it didn't work out well for Tony Blair.

So, I think a lot of Australians say, look, if you disagree with Trump, do it in public, negotiate in public. Because if you negotiate in private, you really see the big part of the story is, Trump wanted something back here and what Trump wanted back is going to be I think much more detrimental to Australia than taking, you know, 1250 refugees, given the world's refugee crisis.

So there's something back could have been relating to China, which Australia clearly shouldn't engage with. So it's a very revealing conversation and I think it will send a lot of shock waves through Australian politics in the next few weeks.

VAUSE: Next few weeks? But what about long term, how does this change the dynamics of the relationship?

O'CONNOR: Well, that's a wait-and-see matter, and I think Australia needs to be more cautious regarding Trump. We need to see if this talk is being the case is being true, in terms of borders and a Mexican wall, is he going to want a trade war with China? That is not in Australia's interest. Is he going to want to up being the One- China Policy? Australia likes the status quo. The status quo sits Australian foreign policy pretty well.

The idea that someone is going to come along and change the rules is not suitable for Australia. So I think the longer term strategy has got say, well we're putting the relationship a little bit more on hold. It's on pause and we want to see if Trump really means what he said regarding Chinese/American relations because Australia has a lot to lose if there is some kind of trade war or aggravation between these two nations.

VAUSE: OK, Brendon. We'll leave it there. Thanks for being with us. Brendon O'Connor, Associate Professor at the University of Sydney. We'll look more on this. So John, first to you, a lot of people have pointed out, Donald Trump in a heated argument with one of the United States' oldest and most trusted allies. But yet, while Russia is escalating the violence in Ukraine, the administration is silent. [01:04:57] JOHN THOMAS, REPUBLICAN CONSULTANT: Well, the question is, first of all, who leaked this conversation? I don't know if it was Australia or if it was - it was Trump first. But one thing we know about Trump is, it's the relationship in the past is really irrelevant. It's what have you done for me lately? And Trump threw down the gauntlet on the issue of refugees and he's not going to let somebody steamroll him and make him look weak by accepting refugees when he said it's not the case.

VAUSE: OK. On the issue of the leaks, the sources that we're getting, it's coming from those who are close to the phone call on the Donald Trump hands. So it's coming from within the administration, certainly, if you look at the reporting that we've read in the Washington Post and our reporting as well. So Mo, we're, what, 13 days into this administration. It's leaking like a sieve.

MO KELLY, RADIO HOST: Yes, but I would say that the leaks are really irrelevant if only because you didn't have the sitting President go on Twitter and affirmed that whatever was leaked, was actually true. And if anything, if people within your own administration are so willing to leak, that says to me that there is cause for alarm in the - in the sense of being on one unified front as far as believing the President, his vision and also how he is handling his diplomacy. If people are going to leak now, what happens as we get further down the road and more people are going to dissent?

VAUSE: OK. We also have information, a leak, about a phone conversation between Donald Trump and the President of Mexico. This was on Friday. Apparently the President said to Pena Nieto, "You have pretty tough hombres in Mexico that you may need help with. We are willing to help with that big league, but they have to be knocked out and you have not done a good job knocking them out." John, again, this is a close ally of the United States and it sounds like a contentious phone call.

THOMAS: It certainly sounds like it was. But, look, this is who Donald Trump is and I'm, quite frankly, fine with it. He is laying out the case, we need your help. We are going to do some of the lifting but you're not doing your half of the job. I think it's refreshing that he is - that he is being so tough. And here's the other thing, it's in such stark contrast to the last eight years. I think that's why we are sitting here a little stunned.

KELLY: No, I don't think it's a stark contrast the past eight years. How about the past 80 years? You have a president who is speaking to the President of Mexico

saying, hombres. That's a - that's a word from the campaign trail. It's very dismissive and it almost highlights his insensitivities as far as the complexity of this nature --

THOMAS: He didn't bring up taco bowls.

KELLY: It was not that far away.

VAUSE: But don't you get more if you build bridges and you have a partnership rather than trying to bully people and force them into, you know, hanging up on phone calls and, I'm going to send the troops in?

THOMAS: I mean, but that's Trump's temperament. That's consistently who he's been. And also he is trying to train these other countries that look, it's kind of my way or the highway. I mean, that's what is. It will be interesting to see how Rex Tillerson juggles that dynamic as our, you know, lead spokesman.

VAUSE: OK. We're also hearing from the Washington Post that the President bragged about his electoral win, not just to the President of Mexico but also to the Australian Prime Minister. He was also talking about the size of the crowds that turned out to his inauguration. You know, John, this does sound like it's just becoming obsessive.

THOMAS: Well, the President's always been keen on ratings and how successful he is and how his products are great. This is just who he is to his - it's his core identity. I wouldn't expect anything to change. I think he's also trying to make it clear to these other leaders that he is a popular president that he came in with a mandate. And then he knows what he is doing. He's never done this before. He has got a lot to learn. But, I also think there is something refreshing about it. As an American citizen, it's kind of neat that I can tune into Twitter and see diplomacy in action versus working in smoke-filled rooms which is what happened before.

VAUSE: Diplomacy is like sausage making. It's better not to see.

KELLY: That doesn't appeal to me. Of course, I don't agree that he has a mandate. We know that he did not have the popular vote. And so if voters were rearranged differently, he would have lost the election. And also, I need a president who moves from I and me to we, because he's a leader of the free world which speaks to his relationship with Mexico, which speaks to his relationship with Australia.

And if i take a step back, I'm not sure. Is Australia our enemy or our friend? Is Mexico our enemy of our friend? And there - and since the point has been made that he does need something from Mexico, he does need something from Australia. It would be in his best interest and it would behove him to do a little more listening and be a little bit more conciliatory if he is going to make these deals.

VAUSE: We are also hearing, again, from sources that this is -- he had a long day and the conversation with the Australian prime Minister was one of five conversations with world leaders, he was fatigued. You know, but Mo, this is what he signed up for. This is the job, right?

KELLY: He asked for the job. I would be concerned, was his hanging up, for lack of a better phrase, on the Australian Prime Minister the result of frustration or is he juggling too many balls at once and the pressure of the moment and these -- all these fights including congress and also this foreign policy getting to him? I'm not exactly sure what it is.

[01:10:00] VAUSE: And apparently, again, from sources, every time one of these world leaders challenge Mr. Trump on an issue of foreign policy, he got upset or chafed or hung up. I mean, is this the way the United States is going to be doing diplomacy from now on? (CROSSTALK)

THOMAS: I would be surprised if Rex Tillerson is going to let - I mean, he - I think he is an even-keeled temperament.

VAUSE: Rex Tillerson will fix everything?

THOMAS: No, he's going to be the one doing most of the talking.

VAUSE: OK.

THOMAS: So I think President Trump is getting sea legs. It's not easy.

VAUSE: OK. Stay with us because earlier on Monday, the President's National Security Adviser made a surprise appearance in the White House briefing room, delivered a blunt warning to Iran over its most recent test of a ballistic missile which the U.S. says violates a U.N. Security Council Resolution.

(BEGIN VIDEOCLIP)

MICHAEL FLYNN, UNITED STATES NATIONAL SECURITY ADVISER: President Trump has severely criticized the various agreements reached between Iran and the Obama administration as well as the United Nations as being weak and ineffective. Instead of being thankful to the United States and these agreements, Iran is now feeling emboldened. As of today, we are officially putting Iran on notice.

(END VIDEOCLIP)

VAUSE: Rick Francona joins us now, our military analyst. So Colonel Francona, what we're hearing from General Flynn, it sounds very much like a threat, almost like a red line.

RICK FRANCONA, CNN MILITARY ANALYST: Yes, I think that's exactly what it is. I think, John, I think what we're seeing are the initial steps of the Trump administration to roll back the Iran deal. He is setting the ground work for what he believes needs to be overturned. And one way to do that is to find the Iranians in violation of certain agreements. The general is right the Iranians have been more emboldened since the signing of the Iran deal.

I think the Obama administration, rightly so, believed that this deal would rehabilitate the Iranians. It would change their behaviour. It would bring them back into the community of nations make them easier to deal with. That's not the case. They upped their ballistic missile test. They've become more aggressive in the Persian Gulf. They've conducted attacks in the Red Sea. So whatever that belief on the Obama administration was, it was obviously incorrect.

So I think the Trump administration is going to look at rolling back that agreement. This is the first step. I'm not sure it's going to work and I know your next question is what does on notice mean? That's not in the military play book. So I don't know what it means.

VAUSE: OK. Well, that was my next question but I will ask you, what do you make of the way General Flynn did this? You know, the dramatic entrance, the surprise appearance at the White House briefing, talking for 20 seconds, taking no questions and then leaving?

FRANCONA: I think that's the - it's going to be the hallmark as your other guests were saying. This is - this is the new sheriff in town. This is how they're going to do things. They have that very brash approach. Here it is, this is the way we're going to do things and as, I think one of them said, "It's our way or the highway." I think he's taking his lead from the President and we're going to hear more of this. And I think we're rushing fast towards some sort of crisis.

The Iranians are going to test the President. The Chinese are going to test the President. The Russians already started testing the President. And they're going to have to be prepared to push back on all of these and I think the cracks are beginning to show.

VAUSE: OK, Colonel, thank you. Colonel Rick Francona there, we appreciate the incite, back to our panel. John, so this is (INAUDIBLE) it does feel as if, you know, with this brinkmanship, with the threats and the red lines and the warnings of official notice that this is moving towards a confrontation, because what happens if the Iranians do test another ballistic missile, what's the response?

THOMAS: President Trump on Day 1 is starting with his back to the wall. He was handed a raw deal. First of all, the Iran nuclear deal in republicans' opinions and President Trump was a terrible deal. Iran has been able to walk all over America over the last eight years and they are testing him. And so Trump is just like a little child. If you let them get away with anything on Day 1, they're going the take more and more chances.

So Trump's coming out and saying, "If you step any further, we're going to put you in place." I think it's absolutely the right thing to do. The problem is what is the next step? I don't have that answer. But I think Trump's trying to teach some of these different bad actors a lesson.

VAUSE: I think the problem is you don't have the, you know, the following answer to that question. Mo, does the administration have the answer to that question?

KELLY: Well, then questions, what is the wisdom of this diplomacy or diplomatic action against Iran if you are still having to juggle these other balls of ISIS, you still have to deal with Russia. You're not sure that you're going to have the support of Australia going forward, let's be honest. You're not going to be as easy to develop a coalition if you're going to have a military conflict with Iran, heaven forbid.

VAUSE: Is there a feeling that, you know, Donald Trump is operating from a point in time when the United States carried a lot more weight and, you know, could go it alone. We're no longer in that world any more. The United States is no longer the biggest, baddest, actor on the block and that's why President Obama, Bush, Clinton built all of these coalitions around the world because that was the way after the Cold War that, you know, these global coalitions actually, you know, kept the peace and that was the way the world was working.

[01:15:09] THOMAS: And look at where we are in now. Iran --

VAUSE: But we haven't had a war.

THOMAS: Yes, but Iran is spinning centrifuges to build a nuclear weapon. I mean, we have to walk that back or maybe not under President Trump but the next president after that, could be dealing with a nuclear crisis on his hands. I think President Trump understands the way we are doing business has gotten us to this point, and that's a bad thing. We've got to revamp our foreign policy.

VAUSE: So, Obama's fault then?

KELLY: I don't know if it's Obama's fault. We're talking about 70- year-old technology. We're talking about a nuclear weapon. It's not like that science is not out there. I believe that these different countries will get a bomb because it's technologically inevitable. Now, we can either deal with that eventuality or we can try to blow them off the face of the earth to keep them from getting the bomb. That seems like the only two choices that we're being presented with.

THOMAS: We gave them a fast track pass under the Obama administration.

VAUSE: OK. We're in for some interesting days. John and Mo, I appreciate being with us, also, Rick Francona as well. Violent protests have erupted at the University of California in Berkeley, forcing the cancellation of a speech by the right wing commentator, Milo Yiannopoulos. Some of the demonstrators set fires, destroyed property and we've seen throwing fireworks at police, trying to create as much chaos as they could.

Yiannopoulos told his Facebook followers that the left is absolutely terrified of free speech and will do literally anything to shut it down. Kyung Lah joins us from the site of the protest. So Kyung, what's the latest on the demonstrations?

(BEGIN VIDEOTAPE)

KYUNG LAH, CNN CORRESPONDENT: The demonstration, the large demonstration that shut down the - that shut down that speaker, John, largely over, what we're seeing here are just a small, small handful of some hard-core agitators that are walking around downtown Berkeley. But you can see there is still a sizable university police protest. The reason why is because what we saw earlier this evening.

We got a bit more context from the university spokesperson and he told us that there were about 1500 protesters who took part tonight. They -- the protest started about 5:00 Pacific time. At about 5:30, the university believes 150 -- approximately 150 outside agitators, these are known agitators to the city of Oakland then decided to show up. They are the ones that the university says are responsible for the violence.

Now, there were some strong themes of free speech and trying to stop Yiannopoulos from speaking that they found that he was propagating hate speech. That was coming from the students. The violence the university believes was coming from these outside agitators and that's what spiralled out of control. There was a large crowd, though, John. When I looked to the crowd, there were Cal students who did decide to stay but the violence university is putting on these outside agitators.

VAUSE: Kyung, why is Yiannopoulos such a lightning rod?

LAH: It's because of what he does. It's -- he is a self-described troll. That he is a social media troll. That's how he describes himself. That he is somebody who is a celebrity and the way he is finding that celebrity is through, primarily, saying whatever he thinks, a lot of it is insulting. People here on campus say that they find what he says about lesbians, about feminists, about gay people and Yiannopoulos also identifies as gay.

That all of that, they find to be reprehensible and that he should not be allowed to say it on this campus. Of course, this is a campus that was the birth place of a free speech movement in the 1960's, the campus that fought very hard to have the ability to stand up and say unpopular things when, you know, politics is not necessarily their way. So there is quite a bit irony here in that position. John?

(END OF VIDEOTAPE)

VAUSE: OK. Kyung, thank you for that. Kyung Lah live at Berkeley where it has just gone 18 minutes past 10:00.

SOARES: Now, still to come right here on CNN NEWSROOM the new U.S. Defense Secretary is on his first official overseas trip trying to reassure Asian allies that Washington will keep its security commitments. Plus, critics say that Trump administration's immigration ban won't protect America but will have in fact the opposite effect. Ahead, what is showing up in Jihadi communications, both those stories right here on CNN NEWSROOM.

(COMMERCIAL BREAK)

[01:20:00] PATRICK SNELL, CNN WORLDSPORT ANCHOR: Hi there, I'm Patrick Snell with your CNN WORLD SPORT Headlines. The Africa Cup of Nation's semi-finals taking place Wednesday in Gabon with the tournament's most successful team, the seven-time winners Egypt, booking their spot in Sunday's final after beating Burkina Faso. The Pharaohs opening up the scoring through Mohamed Salah but Burkina Faso would level later on the match.

It goes to a penalty shootout where the 44-year-old keeper for Egypt, Essam El-Hadary played the hero there saving their veteran. (INAUDIBLE) penalty to send them through Egypt. They will play the winners of Thursday, something between Cameroon and Ghana. Real Madrid looking increasingly more likely to -- very difficult to stop it seems when it comes to this season's La Liga title. No wonder then Barcelona are likely viewing this season's Copa del Rey

as their best chance at domestic silverware on Wednesday. They took on Atletico in the semi-final first big tie and after just seven minutes, Luis Suarez opened up the scoring before Lionel Messi would double the lead. Barca hold on for the 2-1, the first leg victory. The England's Premiere league, Fifth place Man City, traveling to West Ham, United London stadium ground where the citizens won 5-0 last month in the third round of the F.A. Cup. Once again, City easing to the win, 4-0 this time Kevin De Bruyne the Belgian international getting the ball rolling for the visitors, David Silva got the second before Gabriel Jesus scoring his first ever Manchester City goal. City win it 4-0. That's a look at your CNN WORLD SPORT HEADLINES. I'm Patrick Snell.

(COMMERCIAL BREAK)

VAUSE: This is NEWSROOM L.A. I'm John Vause in Los Angeles.

SOARES: And I'm Isa Soares in London. Now, new U.S. Defense Secretary James Mattis is in South Korea right now on his first official overseas trip, he arrived just a short time ago. Mattis has to reassure South Koreans that the U.S. is committed to their security, especially in light of what the Pentagon calls the evolving North Korean threat. Well, he's also expected to reaffirm the U.S. commitment to a controversial missile defense system known as THAAD.

CNN's Paula Hancocks joins us now from Seoul, South Korea with more, and Paula, how much of this trip is about gauging the North Korean threat?

(BEGIN VIDEOTAPE)

PAULA HANCOCKS, CNN CORRESPONDENT: Well, Isa, what we've heard from Secretary Mattis so far just at the end of his flight here is, he is effectively on a fact-finding mission. He has said that he wants to come here to listen, to engage, to find out exactly what is going on and then you will have a better understanding of it. So a fairly measured comment or start to this trip from the Defense Secretary.

Now, he will only be on the ground for 24 hours, really, less than 24 hours, but what he wants to do is to meet the people who would be making the decisions here. He's currently meeting with the U.S. leadership of the U.S. military down on the Yongsan base here in Seoul. He'll then be coming to the Blue House, the Presidential Palace. You can see behind me with the blue roof to meet with the national security advisor. He'll then meet with the acting president.

[01:24:57] So he is meeting with the leadership across the board. He says to find out exactly what is needed and what the problems are. He was asked about North Korea inevitably. He did say that North Korea is often acted in a provocative way. It's hard to anticipate what they do and specified that they needed the THAAD missile defense system here in South Korea because of North Korea and its threat. Isa?

SOARES: And Paula, let me ask you about the THAAD you were talking there about the controversial missile defense system. Why -- explain to our viewers around the world, why is it so controversial?

HANCOCKS: Well, for those in South Korea and the U.S. military, it's believed that the threat from North Korea is so high that the ballistic missiles that they have and they frequently test certainly in 2016, more than 20 of those ballistic missiles were tested. They believe it is necessary to have this defense system here. China and Russia disagree. They are very much against this system.

China, for example, quite frankly doesn't want more military hardware from the United States on their doorstep. They believe that it would be used against them, that it could be focused on China, but the U.S. military insists it won't be. It will only be focused on any potential ballistic missiles heading towards South Korea. So this is the effectively the reason to -- for and against the THAAD system. But the U.S. and South Korea are adamant it will go ahead. It will go ahead this year and will be put in place. Isa?

(END OF VIDEOTAPE)

SOARES: Paula Hancocks there for us in Seoul, South Korea. The time is 1:26. Thanks very much, Paula. John?

VAUSE: We'll take a short break, Isa. When we come back, Australia's Prime Minister offers his account of that contentious phone call with Donald Trump. We'll also look at the center of the dispute in just a moment.

(COMMERCIAL BREAK)

(COMMERCIAL BREAK)

[01:30:17] ISA SOARES, CNN ANCHOR: Welcome back to our viewers in the United States and right around the world. I'm Isa Soares, in London.

JOHN VAUSE, CNN ANCHOR: I'm John Vause, live in Los Angeles. Thanks for staying with us, everyone.

Here are the headlines this hour.

(HEADLINES)

SOARES: Some critics of President Trump's travel ban call it strategic suicide. They say the policy will become a key tool for ISIS to discredit and demonize the United States.

I was reading your article you wrote. You said the travel ban lacks compassion, but it is also strategic suicide. Why is it strategic suicide?

JULIA EBNER, POLICY ANALYST QUILLIAM FOUNDATION: Yes, absolutely. Thank you for having me. I think it will be counterproductive to making America safe again, if you want to say so. I think it is the problem is that ISIS has been exploiting grievances resulting from both foreign policies but also national policies within Muslim communities, and this policy really risks to drive communities further apart and to result in almost identity wars that we have seen in France.

SOARES: How have jihadists taken to the executive order? What have you been seeing online?

EBNER: In their Telegram channels, they have clearly celebrated the latest travel ban. They have, in fact, called it a blessed ban. That's something they refer to. For example, they have also called the Iraq war a blessed invasion because they use it as a recruiting tool. And similarly, we've seen pictures circulating within Telegram channels. One of them, for example, contests of jihad where they posted a picture of Trump holding a sign that referred to the doomsday, because they see the end of times coming, and a final battle created by this chaos and these divisions within our communities.

SOARES: Yesterday, on the show, roughly at this time, we had a guest to said this is a Muslim ban. We know the administration is saying it isn't. This guest said, look, if it walks like a duck and talks like a duck, it is a duck. Is there a fear that what many people see it as discriminatory against one religion, that that could help ISIS in many ways in terms of recruiting internally within the United States?

EBNER: Absolutely. It's much more about perception than about the policy. It sends such a strong symbolic message that it could, indeed, help radicalize or it could, indeed, increase the threat of home grown terrorism. So actually, most of the threat that the U.S. is facing is coming from within its borders. So, looking for problems outside might not be the smartest strategic move to go about it, and maybe some solutions may, on the other hand, lie outside of the country.

SOARES: And we know that for years now Islamic extremists have played that the West is at war with Islam, and this plays into that narrative, doesn't it?

EBNER: Yes. Absolutely. So, it's feeding into that narrative of the United States leading a war against Islam and trying to basically trying to undermine all the values - sorry, all the rights that Muslim communities have, and it fundamentally undermines the values in the United States is based. Right now, Muslim Americans into the American flag hanging outside their houses. How long with l that last if they see policies like this?

SOARES: I want to go back to the jihadists and those websites. You're talking about Telegrams. Explain to our viewers what it is and the undertone since the ban has come in, what they've been saying.

EBNER: Telegram is an encrypted messaging application that is used now that Twitter has shut down extremist accounts. They have switched a bit to that messaging app. And there's some groups that are not centrally coordinated by ISIS but that are led by ISIS supporters. And we've seen really enthusiastic comments about the travel bans being made, because they see it as a tool, in fact, or they see it helpful for spreading their narrative of the West being at war with Islam.

[01:35:30] SOARES: So they're plotting it because it's a positive for them.

Julia Ebner, thank you very much.

EBNER: Thank you.

John?

VAUSE: More now on Donald Trump's heated phone conversation with the Australian prime minister, Malcolm Turnbull, over the weekend.

Paul Bongiorno joins us now live from Canberra, Australia, with more.

Paul, there was a hand full of people in the room with the U.S. president when he made that call to - well, Malcom Turnbull called him rather. Any word, any idea who on the U.S. side leaked the details and why?

PAUL BONGIORNO, AUSTRALIAN POLITICAL REPORTER: No. I mean, people are speculating wildly, and I've seen interviews with the reporter from "The Washington Post," and of course, he's not going to give away his sources. There is a suspicion here in Canberra that it's actually been briefed out of the White House. There's been a couple of events in the last 24 hours. You might remember that Sean Spicer briefed on camera from the White House briefing room yesterday that the deal was on, and he even gave a number that 1250 refugees from, he said, Papua, New Guinea, would be subject to extreme vetting.

Now, there is a view within the Australian government that maybe someone in the West Wing, probably, whose name is Donald Trump, wasn't too happy with that. And there was then somebody within the White House that briefed the Australian Broadcasting Cooperation to say that the deal wasn't done, that it's all still in play.

However, what we have on the record is the prime minister, as late as a half an hour ago, telling radio in Melbourne that Donald Trump did say he would honor the deal done with the Obama administration. We know that the White House press secretary thought it was on and the State Department in Washington thinks that too, according to our embassy in Washington.

What we do know, of course, especially now that Donald Trump himself has tweeted, that he thinks it's a dumb deal. He doesn't call these people refugees. He calls them illegal immigrants. And the tone of the tweet is that, well, why should Australia dump these illegal immigrants on us. We know from "The Washington Post" and from CNN sources now that Obama -- sorry, that the president apparently told the prime minister that, what do you want to do, you're sending us the next Boston bombers. So, it's all gone very quickly to mud as far as the Australian government is concerned. VAUSE: Just explain to us, though, Paul, what exactly is this deal

that they are talking about? Why would the United States take 1200 asylum seekers from Australia?

BONGIORNO: That's a very good question, John. I'm glad you asked it, because it's very hard to get any real answers here. There was talk, you may remember, last year, that what was going to happen was that Australia would agree to take refugees from Puerto Rico that were bound for the U.S. within the cohorts that the refugees that the U.S. Was prepared to take, and in a sense, we would take those refugees and our 1200 would take their place. But for some unknown reason, a fog of uncertainty here, our prime minister's office says, no, there's no swap, and then you have to say what is the deal. And I suspect that's probably what President Trump said to Prime Minister Turnbull.

VAUSE: OK. What we know from the details we're hearing about this conversation is essentially Donald Trump gave the prime minister a bit of a hiding. What would be the impact for him politically and how will most Australians see this?

BONGIORNO: Well, I think it's an embarrassment, very much, for Turnbull. He did get kudos for trying to do this deal with Obama because his predecessor thought that sending these asylum seekers to a first world country, like New Zealand, Canada or the United States, would encourage more to try, because they could then use Australia as a back-door way to try to get to the U.S. or wherever. But Turnbull doesn't want to leave these peopling languishing on the island. In fact, on the island, the New Guinea supreme court has found it's an illegal agreement, and really, we and the government of Papua New Guinea is dragging the chain obeying the law of New Guinea by not removing them from the island.

[01:40:10] OK. It's all very complicated. There's a lot more complication after we found out the tone of the conversation between these two leaders.

Paul Bongiorno, so great to speak with you. Thank you.

BONGIORNO: Good evening, John. Bye.

SOARES: And still ahead on CNN NEWSROOM, Israel announces plans for a new settlement in the West Bank. The announcement is sparking criticism from around the world, but not, it seems, the U.S. We have that story next.

(COMMERCIAL BREAK)

SOARES: You are watching CNN's live coverage. I'm Isa Soares, in London.

VAUSE: I'm John Vause, in Los Angeles.

Israel is doing something it hasn't done in about 20 years, planning to build a new West Bank settlement. Israel has already said it will put thousands of new homes in existing settlements. Under international law, they're illegal, because the West Bank is considered occupied territory. On Wednesday, the Israelis evacuated outposts on private Palestinian lands. Some settlers left peacefully and others fought with police. The evacuation was ordered by Israel's high court.

Joining me now for more on this, Eric Bordenkircher. He's a researcher at the UCLA Center for Middle East Development.

VAUSE: For years, Israel has always described the new housing in the settlement as simply adding to existing neighborhoods. They said they're making the settlements larger in population, but not taking away more land. That was kind of controversial in and of itself. Now what we're hearing is something completely different. A new settlement and they're now looking for a piece of land to build it. This is a very big departure from what we've seen after the last 20 years.

BORDENKIRCHER: The status quo is changing.

SOARES: So what are the implications here?

BORDENKIRCHER: Just when you think things can't get worse in the Middle East, they do. I think there's several implications. It puts the United States in a difficult position, because this is something that is not welcomed by the Palestinians, obviously. And the United States is supposed to present itself as this neutral figure in the negotiations between the Israelis and the Palestinians. And if they do accept this, it's not going to look very favorable in their terms and makes it much harder for the Americans to negotiate a settlement in this area.

[01:45:22] VAUSE: So beyond the Israeli/Palestinian conflict, if the United States loses the role as the honest broker in this conflict, what impact does that have on other areas of the Middle East where the United States is trying to implement policy? ISIS, as one example?

BORDENKIRCHER: It can hurt it. I think the settlement issue is not that big a deal. I think the issue if the United States moved the embassy to Jerusalem would be a bigger deal and hurt its relations with the Arab and Muslim world. The settlements I don't think. But the settlements, because the settlements have been growing. And obviously, this dynamic is a little different. But at the end of the day, I don't think it's going to change things that much. I think it might have an impact on the Palestinians and you might see the Palestinians respond very aggressively and potentially violently to this development.

VAUSE: For the Palestinians, we keep hearing this, this is the land they want for a future state and they continue to lose more and more of this land to the settlements. There was always an argument that the settlements would be a swap for land in northern Israel where it's prominently an Arab Israeli area if there was a peace deal. If the settlement building continues, there's an opinion that that's an indication that the Israelis are giving up on a two-state solution.

BORDENKIRCHER: True. It's undermining the possibility for a two- state solution and pushing toward annexation. You had a Palestinian state that looked like swiss cheese. And I don't even know if we can characterize it as swiss cheese any more.

VAUSE: The argument the Palestinians say will the settlement, should they continue to build the settlements, they won't have a viable fate.

BORDENKIRCHER: True.

VAUSE: What are their options?

BORDENKIRCHER: The Palestinians?

VAUSE: Yeah.

BORDENKIRCHER: They're going to contest it, probably with the United States. Internationally, as well.

I have to be honest, I don't think they can do very much. I think it shows how helpless and also how weak the Palestinian leadership is, particularly the P.A., and I think it's going to result in violence, demonstrations, and potentially, terrorist attacks.

VAUSE: Eric, thank you for coming in.

BORDENKIRCHER: My pleasure.

VAUSE: I mean, clearly this seems to be like another turning point in the region. And we'll see what happens.

BORDENKIRCHER: Thank you.

VAUSE: Thank you.

SOARES: Now, President Trump is staying quite busy in his new role, but what about the first lady? Ahead, Melania's quiet life since her husband took office. We'll have that story for you after a very short break.

(COMMERCIAL BREAK)

(WEATHER REPORT)

[01:51:33] VAUSE: Well, Donald Trump's election campaign was full of showmanship. And there was one moment which stands out, when Mr. Trump produced a note from his doctor, Harold Bornstein, proclaiming he would be the healthiest individual ever elected to the presidency. Now "The New York Times" quotes Bornstein the president takes medication for his hair. He takes the prostate drug, Propecia, to promote hair growth. Mr. Trump is very sensitive about his hair. The White House has not responded to Bornstein or "The Times."

And while Donald Trump has been busy in the West Wing, the East Wing is missing its first lady. Melania Trump has now hired a chief of staff but she has not been by her husband's side for the first two weeks of his presidency.

Here White House reporter, Kate Bennett.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Congratulations, Mr. President.

(CHEERING)

KATE BENNETT, CNN WHITE HOUSE CORRESPONDENT (voice-over): It's been 12 days since her husband was sworn in, and Melania Trump has yet to return to Washington, D.C.

(SINGING)

BENNETT: Without her living under the same roof as her husband, the responsibilities of the office of the first lady are in limbo. With the White House Visitors Center on staff, that means no White House tours, and with no appointed social secretary, there is no one to plan state dinners or the Annual Easter Egg Roll.

(APPLAUSE)

MELANIA TRUMP, FIRST LADY OF THE UNITED STATES: We must find better ways to honor and support the goodness of our children, especially in social media.

BENNETT: Mrs. Trump has said she plans to take on cyber bullying as first lady but has not yet announced a social platform of official causes, a schedule of events or her Washington calendar. She has also not yet hired a full staff in the East Wing, all things past first ladies do immediately after their husband takes office.

In November, her husband told reporters that Mrs. Trump would delay moving to Washington until 10-year-old Barron Trump completes his school year.

More recently, President Trump told "The New York Times" the family will return to D.C. on weekends.

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: Our first lady.

BENNETT: But Melania Trump has not been seen in Washington since she returned to New York the Sunday after her husband was sworn in, which was also their wedding anniversary.

The only sighting of the first lady since leaving D.C. was on Monday night when the paparazzi caught her running errands in New York.

Melania Trump made few appearances on the campaign trail, a decision she told Anderson Cooper was hers.

MELANIA TRUMP: They would have me on the trail all the time. They wish to have me there. But I made the decision, I will be a parent to our boy, to our child. BENNETT: She spoke at the Republican National Convention in August

where she was met with controversy amid allegations she plagiarized part of her speech from Michelle Obama.

MELANIA TRUMP: He is tough when he has to be but he is also kind and fair and caring. This kindness is not always noted but it is there for all to see.

BENNETT: And she defended her husband when the "Access Hollywood" tapes were released, calling it boy talk.

MELANIA TRUMP: I told my husband that the language is inappropriate, it's not acceptable. I accept his apology. I hope the American people will accept it as well. And it was many, many years ago. He is not the man that I know.

BENNETT: She traveled to Washington for the inauguration, looking every bit the first lady in a Jackie Kennedy-inspired ensemble and she gave brief remarks at the inaugural armed services ball, thanking the attendees for their service.

[01:55:12] MELANIA TRUMP: I'm honored to be your first lady.

(CHEERING)

MELANIA TRUMP: We will fight, we will win, and we will make America great again.

(CDHEERINHG)

(END VIDEOTAPE)

VAUSE: There we go. We found out where Melania is.

You have been watching CNN NEWSROOM room live from Los Angeles. I'm John Vause.

VAUSE: I'm Isa Soares, in London.

We'll be right back after a very short break. Don't go anywhere.

(COMMERCIAL BREAK)

SOARES: Hello, and a very warm welcome to our viewers right around the world. I'm Isa Soares in London.

[01:59:46] VAUSE: And I'm John Vause, in Los Angeles.

We began with that breaking news. U.S. President Donald Trump berating the Australian prime minister, on the same day his national security advisor issues a blunt warning to Iran.

Standing by in Canberra is Australian reporter, Tim Lester. He has details on that hostile conversation between President Trump and Prime Minister Malcolm Turnbull. CNN military analyst, Lieutenant Rick Francona, will have more on the Trump administration's blunt warning to Iran.